US regulators just filed a complaint against a crypto manager who allegedly made a fraudulent $16 million securities offering.
The US Securities and Exchange Commission (SEC) say that GIBF GP Inc. and Monsoon Blockchain Corporation founder Donald Basile offered investors Simple Agreements for Future Tokens (SAFTs) that would supposedly allow them to receive a crypto asset called Bitcoin Latinum, BTCL, or LTNM once a certain milestone is reached.
“[T]e SAFT defined Milestone as ‘the newly forked Bitcoin network is operational after a successful Hard Fork with Token functionality as determined by [GIBF] at our sole discretion.”
The securities watchdog said Basile claimed LTNM is the world’s first insured digital asset with up to $1 billion in coverage from an international insurance broker and risk advisor, despite no insurance company ever issuing a policy on the cryptocurrency.
Basile is also accused of falsely stating that LTNM is backed by a basket of digital assets, when the token had no asset backing at all.
He said at least 80% of the proceeds from the SAFT offering would have gone to supporting the development of LTNM or to an underlying fund, but this would not have happened. The SEC says Basile instead used the investor fund accounts for his personal benefit.
Basile allegedly used $4.1 million to purchase a condominium in Miami, Florida; $2.8 million for a house in Park City, Utah and $1.4 million to pay for his personal American Express card. He also bought a $160,000 horse for his daughter.
“Eventually, after selling SAFTs to hundreds of investors, Basile stopped promoting LTNM; LTNM is now worthless and many investors have lost their entire investment.”
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